Question 1

According to human capital theory, which of the following is not a reason college graduates earn more than those with only a high school degree?

Accepted Answer

A) College graduates insist on a financial return on their human investments. 
B) College graduates are made more productive by their greater training. 
C) Jobs that require more education must pay higher wages to attract enough workers. 
D) Income effects are higher for jobs requiring more education. 
A) College graduates insist on a financial return on their human investments. 
B) College graduates are made more productive by their greater training. 
C) Jobs that require more education must pay higher wages to attract enough workers. 
D) Income effects are higher for jobs requiring more education.

Question 2

Labor unions in the United States

Accepted Answer

A) tend to be more outspoken politically than those in Europe. 
B) have experienced steady declines in membership since the 1950s. 
C) tend to be more powerful in deregulated industries (e.g., airlines) than in regulated industries. 
D) universally support socialist principles. 
A) tend to be more outspoken politically than those in Europe. 
B) have experienced steady declines in membership since the 1950s. 
C) tend to be more powerful in deregulated industries (e.g., airlines) than in regulated industries. 
D) universally support socialist principles.

Question 3

In reality, there is not one labor market, but many.

Accepted Answer

A) True 
 B)False

Question 4

One of the reasons for the growth performance of free-market economies is firms' use of innovation to compete with one another.

Accepted Answer

A) True 
 B)False

Question 5

The initial stage of the procedure in which a union and an employer negotiate over a contract is known as

Accepted Answer

A) featherbedding. 
B) collective bargaining. 
C) mediation. 
D) arbitration. 
A) featherbedding. 
B) collective bargaining. 
C) mediation. 
D) arbitration.

Question 6

Statistical studies in the United States have reached the conclusion that for most workers the response of labor supply to wage changes is

Accepted Answer

A) quite strong. 
B) not very strong. 
C) inverted. 
D) always zero. 
A) quite strong. 
B) not very strong. 
C) inverted. 
D) always zero.

Question 7

Explain how a bilateral monopoly equilibrium outcome differs from a purely competitive outcome.

Accepted Answer

In pure competition, there are so many s

Question 8

Unions can only achieve wage gains by sacrificing employment.

Accepted Answer

A) True 
 B)False

Question 9

Firms use collective bargaining to set higher market prices for their products.

Accepted Answer

A) True 
 B)False

Question 10

In many high-tech industries in the economy, such as computers, medical equipment, and automobiles,

Accepted Answer

A) price competition is utilized by firms more than innovation to compete with rivals. 
B) firms compete on the basis of innovation only; never engaging in price competition. 
C) innovation is utilized by firms to compete with rivals more than price competition. 
D) firms use price competition only; never engaging in innovation to compete with rivals. 
E) firms utilize innovation and price competition equally to compete with rivals. 
A) price competition is utilized by firms more than innovation to compete with rivals. 
B) firms compete on the basis of innovation only; never engaging in price competition. 
C) innovation is utilized by firms to compete with rivals more than price competition. 
D) firms use price competition only; never engaging in innovation to compete with rivals. 
E) firms utilize innovation and price competition equally to compete with rivals.

Question 11

Over the last 30 years, the income gap between the rich and the poor has declined.

Accepted Answer

A) True 
 B)False

Question 12

A monopsonist hires labor in a market with perfectly competitive supply.Whenever she hires an additional worker,

Accepted Answer

A) she must reduce the wage paid to all workers already hired. 
B) she will not change the wage paid to all workers already hired. 
C) she must raise the wage paid to all workers already hired. 
D) she may or may not choose to change the wage paid to all workers already hired. 
A) she must reduce the wage paid to all workers already hired. 
B) she will not change the wage paid to all workers already hired. 
C) she must raise the wage paid to all workers already hired. 
D) she may or may not choose to change the wage paid to all workers already hired.

Question 13

Creative destruction by innovation means

Accepted Answer

A) destruction of an innovative product once it fails in the market. 
B) introduction of an innovative product makes older substitute goods obsolete. 
C) substitute goods make innovative goods less competitive in the market. 
D) introduction of innovative goods increase the competition in the market 
A) destruction of an innovative product once it fails in the market. 
B) introduction of an innovative product makes older substitute goods obsolete. 
C) substitute goods make innovative goods less competitive in the market. 
D) introduction of innovative goods increase the competition in the market

Question 14

Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?

Accepted Answer

The labor supply curve is based on the w

Question 15

An effective craft union acts as a monopoly

Accepted Answer

A) demander of labor. 
B) seller of labor. 
C) demander of capital. 
D) seller of capital. 
A) demander of labor. 
B) seller of labor. 
C) demander of capital. 
D) seller of capital.

Question 16

The market system has provided great advances in invention, innovation, and economic growth.

Accepted Answer

A) True 
 B)False

Question 17

The United Automobile Workers union can select the most favorable point on the demand curve for labor and the auto manufacturing companies can do nothing in response.

Accepted Answer

A) True 
 B)False

Question 18

One effect of having access to cheap foreign goods can be to raise workers' real wages.

Accepted Answer

A) True 
 B)False

Question 19

From the Industrial Revolution to the present, innovation has played a major role in the growth of output.What do the leading analysts of economic growth argue were some of the most significant innovations of this period?

Accepted Answer

Leading analysts of economic growth argu

Question 20

Describe the profit-maximizing firm's decision about how much to spend on innovation.

Accepted Answer

The profit-maximizing firm will decide h

Exam 19: Labor and Entrepreneurship: the Human Inputs

According to human capital theory, which of the following is not a reason college graduates earn more than those with only a high school degree?

Labor unions in the United States

In reality, there is not one labor market, but many.

One of the reasons for the growth performance of free-market economies is firms' use of innovation to compete with one another.

The initial stage of the procedure in which a union and an employer negotiate over a contract is known as

Statistical studies in the United States have reached the conclusion that for most workers the response of labor supply to wage changes is

Explain how a bilateral monopoly equilibrium outcome differs from a purely competitive outcome.

Unions can only achieve wage gains by sacrificing employment.

Firms use collective bargaining to set higher market prices for their products.

In many high-tech industries in the economy, such as computers, medical equipment, and automobiles,

Over the last 30 years, the income gap between the rich and the poor has declined.

A monopsonist hires labor in a market with perfectly competitive supply.Whenever she hires an additional worker,

Creative destruction by innovation means

Under what conditions is it likely that the labor supply curve may become backward bending? What roles do the income and substitution effects play?

An effective craft union acts as a monopoly

The market system has provided great advances in invention, innovation, and economic growth.

The United Automobile Workers union can select the most favorable point on the demand curve for labor and the auto manufacturing companies can do nothing in response.

One effect of having access to cheap foreign goods can be to raise workers' real wages.

From the Industrial Revolution to the present, innovation has played a major role in the growth of output.What do the leading analysts of economic growth argue were some of the most significant innovations of this period?

Describe the profit-maximizing firm's decision about how much to spend on innovation.

What Is Economics

The Economony: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Supply and Demand: an Initial Look

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production, Inputs, and Cost: Building Blocks for Supply Analysis

Output, Price, and Profit: the Importance of Marginal Analysis

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

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